Podcast
Questions and Answers
What type of documents are used in cross-border trade to effect payment and import?
What type of documents are used in cross-border trade to effect payment and import?
- Transport Documents
- Financial Documents
- Regulatory Documents
- Commercial Documents (correct)
Which of the following Incoterms reflects the extent of the seller's responsibility and liability into the buyer's country?
Which of the following Incoterms reflects the extent of the seller's responsibility and liability into the buyer's country?
- CPT
- CIP
- DDP (correct)
- DAT
What is the primary purpose of the Bill of Lading in bank financing?
What is the primary purpose of the Bill of Lading in bank financing?
- As a financing tool for the buyer
- As a payment method for the seller
- As a collateral or security to the ownership of the goods (correct)
- As a regulatory document for customs clearance
Which of the following is NOT a type of document used in trade finance?
Which of the following is NOT a type of document used in trade finance?
What type of bill of lading is issued when the shipmaster is unable to verify the quality or quantity of the goods?
What type of bill of lading is issued when the shipmaster is unable to verify the quality or quantity of the goods?
What is the alternative financing tool for banks, as mentioned in the module?
What is the alternative financing tool for banks, as mentioned in the module?
Which of the following is not a type of transport document?
Which of the following is not a type of transport document?
How do banks primarily deal with trade transactions?
How do banks primarily deal with trade transactions?
What is the main purpose of an Insurance Certificate?
What is the main purpose of an Insurance Certificate?
What type of documents are used to effect shipment and transportation of goods?
What type of documents are used to effect shipment and transportation of goods?
What is NOT a characteristic of the Incoterms FAS, FOB, CFR, and CIF?
What is NOT a characteristic of the Incoterms FAS, FOB, CFR, and CIF?
What is the function of a Bill of Lading as a title document?
What is the function of a Bill of Lading as a title document?
Which of the following is a type of Insurance Document?
Which of the following is a type of Insurance Document?
What is the purpose of an Order Bill of Lading?
What is the purpose of an Order Bill of Lading?
Which of the following is not a type of Commercial Document?
Which of the following is not a type of Commercial Document?
What does a 'clean' Bill of Lading indicate?
What does a 'clean' Bill of Lading indicate?
What is the primary advantage of a Letter of Credit for the exporter?
What is the primary advantage of a Letter of Credit for the exporter?
Which method of payment requires a high level of trust between the importer and exporter?
Which method of payment requires a high level of trust between the importer and exporter?
What type of documents are used to describe the goods, packaging, and prices in a Letter of Credit?
What type of documents are used to describe the goods, packaging, and prices in a Letter of Credit?
What is the primary risk associated with Open Account trading?
What is the primary risk associated with Open Account trading?
Which of the following is not a type of document commonly used in a Letter of Credit?
Which of the following is not a type of document commonly used in a Letter of Credit?
What is the purpose of transport documents in a Letter of Credit?
What is the purpose of transport documents in a Letter of Credit?
Which method of payment involves the banks acting as intermediaries for both the importer and exporter?
Which method of payment involves the banks acting as intermediaries for both the importer and exporter?
What type of document is used to specify the terms of payment in a Bill for Collection?
What type of document is used to specify the terms of payment in a Bill for Collection?
Flashcards are hidden until you start studying
Study Notes
Incoterms
- CPT, CIP, DAT, DAP, and DDP are rules for sea and inland waterways transport
- These rules reflect the extent of seller's responsibility and liability until the goods are delivered to the buyer's country
- They determine where delivery of goods is said to have been made
Documents in Trade Finance
- Commercial documents: Proforma Invoice, Commercial Invoice, Sales Contract, Packing List
- Financial documents: Bill of exchange, Promissory Note, Bank Draft
- Insurance documents: Insurance Certificate, Marine Insurance, Insurance Policy, Declaration under open cover
- Transport documents: Bill of Lading, Airway Bill, Seaway Bill, Road Transport Bill, Multi Modal bill of lading, Rail Transport Bill
- Regulatory documents: Import Duty Report, Clean Report of Inspection (CRI), Combined Certificate of Value & Origin (CCVO), Attested Invoice
The Bill of Lading
- A receipt issued by the carrier or its representative to the exporter (shipper)
- Evidence of a shipping contract between the carrier and the shipper
- Represents a title document to the goods
- A receipt for the goods providing information about the condition of the goods being accepted for transportation
Types of Bill of Lading
- Straight (non-negotiable) Bill of Lading
- Order Bill of Lading (negotiable, consigned to the order of a specified party)
Methods of Payment
- Open account: exporter ships goods and sends an invoice with payment terms, high risk of non-payment
- Bills for collection: exporter sends title documents to importer's bank through his own bank, specifying payment terms
- Letter of Credit (Documentary Letter of Credit): banks act as intermediaries, reducing risk for the exporter, but increasing risk for the importer
DOCUMENTS IN A L/C
- Commercial documents: describing goods, packaging, and prices
- Financial documents: demand notes, bills of exchange, promissory notes
- Transport documents: evidence of shipment of goods
- Insurance documents: insurance certificates, policies, etc.
- Regulatory documents: specified for importation of goods by a particular country
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
